Robert MarquezProfessor

Jan 17, 2013Ph.D., Massachusetts Institute of Technology

Research Expertise: Banking and corporate
finance

A leading expert in banking and corporate finance, Professor
Robert Marquez tries to uncover the mechanisms that underlie the
behavior of financial institutions. One important focus of his
research is the effect low interest rates have on banks and
whether they encourage banks to take on more leverage. Marquez
joined the Graduate School of Management faculty in July 2012.

Before graduate school, Marquez worked for several years for the
Federal Reserve in San Francisco. Marquez spent eight years on
the faculty of the University of Maryland before accepting a
faculty post at Arizona State University’s W.P. Carey School of
Business. After three years, he crossed the country again to
Boston University, where he was an professor of finance.

His study “Lending Booms and Lending Standards,” published in the
Journal of Finance, offered an explanation for the
sequence of financial liberalization, lending booms and banking
crises observed in many emerging markets. It proved to be a
telling recipe for financial disaster that could, and did, spread
globally, with devastating impacts.

Marquez earned his Ph.D. in economics from Massachusetts
Institute of Technology and his B.A. in economics from the
University of California, Berkeley.

“Financial Institutions and Financial Stability” is the fourth
annual conference hosted by the School’s finance group. Organized
by Professor Robert Marquez, the invitation-only forum brings
together top researchers to present their latest insights on
regulatory reform for financial intermediaries, the past and
future role of capital for banks, crisis resolution, and
liquidity provision by financial institutions. Speakers from Duke
University, New York University, the University of Washington,
the International Monetary Fund, and the Federal Reserve Bank
will share insights from their latest research, with topics
ranging from the response of banks to aid provided to them by the
government, to the role capital plays at financial
intermediaries, among others.

Evidence abounds that in the decade leading up to the 2008
financial crisis, banks significantly expanded their loan
portfolios, often by extending loans to risky customers, and
financing themselves primarily with debt. This led to a rash of
bank failures as banks’ loans failed to repay.

A new University of California, Davis, study says that the low
interest rate environment that prevailed throughout most of that
period was likely an important determinant of that risky
behavior.

As U.S. housing prices peaked during the real estate bubble in
2006, Boston University Associate Professor Robert Marquez and
Giovanni Dell’Ariccia of the International Monetary Fund wrote a
compelling paper showing that when banks have easy access to
capital and demand for credit is high, the tendency is to take
excessive risks that could endanger the financial system.

As U.S. housing prices peaked during the real estate bubble in
2006, Boston University Associate Professor Robert Marquez and
Giovanni Dell’Ariccia of the International Monetary Fund, wrote a
compelling paper showing that when banks have easy access to
capital and demand for credit is high, the tendency is to take
excessive risks that could endanger the financial system.